6 ms·

You have two groups: 1. 5 million unemployed people 2. very highly sought after workers The employers complaining about people in group 2 being scarce are mer

by altoz 10y ago

You have two groups: 1. 5 million unemployed people 2. very highly sought after workers The employers complaining about people in group 2 being scarce are merely not paying enough. The workers complaining in group 1 need more skills that the market wants. They're at different ends of the spectrum. Other than that they live in the same country, they really don't have much to do with each other. Whether you can convert people from group 1 to group 2 is an interesting question, but generally if it were easy to be in group 2, a lot more people would be in it.

charlesdm 10y ago
Very true. Just compare salaries of software engineers in most EU countries with salaries in the US. If you're a good developer, 99% of the time it's better to work remotely from Europe for a US company. It really is a simple problem to solve -- pay talented people in Europe more. And yet, for some reason, this is often dismissed by CEOs as a ridiculous statement. They're probably the same people who think you need 100 software engineers to complete a complex technology project.
- scribu 10y ago
  > It really is a simple problem to solve -- pay talented people in Europe more. Playing devil's advocate: If we limit the discussion to pure tech companies that target a global market, then yes, it is that simple. But there is a vast majority of companies that do not belong to that category, yet require software developers. I'm thinking primarily of Spanish software agencies that have other Spanish companies as clients.
  - charlesdm 10y ago
    There's often still significant leeway. I'm based in Belgium - most senior developers probably make between €3-4000/mo (before tax) here. That's for guys in their mid 30s, early 40s. So a bit better than Spain. My cousin's husband owns a small agency (15-20 people) and sells one developer at €2.000 a day on €500k-1m projects. I think on average they're billed out around 150 days a year, so grossing around €300k per developer, per annum. Paying developers more would mean less profits ending up in his pocket.
    - ido 10y ago
      I'm surprised Belgium isn't better paid, even in Berlin you'd earn better than that (aside from maybe game-dev) and in western Germany you'll earn better than in Berlin.
      - Zardoz84 10y ago
        As junior, I get 1800€/mo (before taxes). I'm Spanish and I live on Madrid.
      - charlesdm 10y ago
        Part of that is because employer contributions (tax + social security) are quite high on wages. Total cost to the company is probably double, i.e. €6.5-8k. In addition, income tax is also very high, so employees are left with <2-2.5k after tax on average. There are ways to reduce the tax rate a bit to an acceptable level, but this depends on the goodwill of your employer. Most just don't care, even though it could mean an extra €1,000 - €1,500 in after tax salary for their employees, without increasing cost to the company. You can even ask the tax authority for a free tax ruling, meaning they approve this and can't challenge it later on. I know what I'd do if I wanted to hire great local developers.. starting by offering a salary that is 1/3rd higher of most other local companies probably isn't a bad starting point.
  - zanny 10y ago
    You only "require" the things you can afford. If a company does not have the revenue to afford paying real market rates for developers, they might want a dev, or even need one, but that doesn't mean they can have one any less than a homeless man can have shelter when he needs it but doesn't have the means to afford it. I always hate the mindset that because developers are in demand for some reason lower wages are acceptable. The opposite is true, exclusively, than when developers are in demand you should demand more money, and accept no less. It is extraordinarily rare for a worker to have any leverage over their employer, to such a degree that there is this systemic culture of employers being unable to stomach the concept of a developer being a skilled professional that demands a professional wage above and beyond what someone driving a truck or working in Excel makes.
    - pakitan 10y ago
      I think you're missing the point. No one is saying that developers should be ok with getting less money when they can get more. The point is that as an employee, you bring certain value to the company. And that value is often capped not by your skills and productivity but by the type of company you work for. And there are less companies in Europe of the type that can afford to pay very well.
- duckingtest 10y ago
  I don't think it's that developers are underpaid in Europe. They are just objectively less productive there. After all it's a very specialized job that requires modern, developed economy open to disruptions to be really productive. On the extreme opposite end of a spectrum - a pre-industrial economy - a developer's productivity would be zero. American nominal GDP per capita is 2.13 times that of Spain's and 1.38x that of Germany's, and the distance keeps increasing. There are many possible causes, but I think lower salaries are a symptom.
  - pcrh 10y ago
    GDP per capita seems to be a curious way to estimate if a local dev is likely to be productive. Would a Luxembourgish, Swiss or Norwegian dev be expected to be more productive than one from the US or UK? It seems to me that the prime determinant of pay is how close the worker's "category" is to the money. So in a start-up intensive environment like the Bay Area, the devs are also sometimes the executives, and executives are often former devs, so devs get paid correspondingly.
    - duckingtest 10y ago
      Switzerland does have higher average pay CHF 91,374 = $93,703.5 [0] compared to USA $68,082 [1]. Their nominal GDP per capita is 36.62% higher and the pay is 37.6% higher. Norway interestingly has almost the same pay as USA - $68,737 [2], probably because of high share of oil extraction in GDP (22% [3]) which skews the result. If you subtract oil share from the GDP, you get $56,195.88 nominal GDP per capita, which is almost the same as the American one ($57,220)! Now Luxembourg is a tax haven/financial center with a population of half a million so I don't think it's a relevant comparison. Just due to population to get something close to true pay average you would have to ask a relatively (to other countries) very big percentage of their developers. Same site for comparable data [0] http://www.payscale.com/research/CH/Job=Software_Engineer/Salary http://www.payscale.com/research/CH/Job=Software_Engineer/Sa... [1] http://www.payscale.com/research/US/Job=Software_Developer/Salary http://www.payscale.com/research/US/Job=Software_Developer/S... [2] http://www.payscale.com/research/NO/Job=Software_Developer/Salary http://www.payscale.com/research/NO/Job=Software_Developer/S... [3] https://www.ssb.no/en/befolkning/artikler-og-publikasjoner/_attachment/237252?_ts=1516c73e3a8 https://www.ssb.no/en/befolkning/artikler-og-publikasjoner/_... page 40, graph
- prostoalex 10y ago
  > It really is a simple problem to solve -- pay talented people in Europe more. And yet, for some reason, this is often dismissed by CEOs as a ridiculous statement. I don't think it's European vs American CEOs, it's treating software engineering as cost center vs value creator. Even in the US one would likely have a hard time procuring a large compensation package employed as a software engineer in a utility company, aerospace company or insurance industry, but the attitudes take a drastic 180 turn with tech-centric and tech-oriented companies where software creates new value.
  - chii 10y ago
    > have a hard time procuring a large compensation package employed as a software engineer in a utility company in which case, there ought to be market pressure for software engineers to move away from such companies. When the company finds out they actually need a good programmer, they end up having to pay more again for quality (perhaps, indirectly, via consulting companies). But the current anecdotal evidence is that those companies _can_ pay very little, and yet, no catastrophe has happened. The only valid business conclusion is that the highly paid engineers aren't needed there!
    - aianus 10y ago
      > But the current anecdotal evidence is that those companies _can_ pay very little, and yet, no catastrophe has happened. Healthcare.gov?
    - wtbob 10y ago
      > But the current anecdotal evidence is that those companies _can_ pay very little, and yet, no catastrophe has happened. The only valid business conclusion is that the highly paid engineers aren't needed there! They pay in other ways: increased layers of management, decreased development speed, decreased software quality. One argument is that they manage to stay in business anyway — but I think we're actually seeing places like that start to go out of business, or at least be surpassed, by nimbler firms. The world is all about information, and those that can do more, faster with it are at a tremendous advantage.
- tluyben2 10y ago
  > If you're a good developer, 99% of the time it's better to work remotely from Europe for a US company Again, how do people get those jobs? I have a lot of friends in the underpaid situation and they applied for stuff on HN; most of them don't hear anything back or have problems with the interviews. They are very good devs though. Loyal too; don't think they would ever leave once on board.
deleted 10y ago
[deleted]
HannibalLecter 10y ago
Guidance counselors need to stop asking kids what they want to do when they grow up and start telling them what is likely to become available by the time they are able to work (post education), matrix'd with the student's potential. Too many idiots trying to be programmers that are no better than VBA and Dreamweaver script kids. If you want to be a programmer, your only option is to get your skillset into group #2, rather than build the skillset you want to build. The best programmers are good at the things people strongly dislike.
joe_the_user 10y ago
1. 5 million unemployed people 2. very highly sought after workers "If there was excess of people in group 2, then there'd be no upward pressure on wages, in the fashion that there is none in group 1. If we import or train enough of group 2, perhaps we can make this happen..." Basically, the message for each group - "we want to pay less".
- gozur88 10y ago
  That's the way I read it. Employers don't want to pay enough to motivate people to develop skills for which they have openings. They'd rather hire foreigners than hire locals and train them. So they put pressure on the government to swamp the market with newly trained/educated people as well as loosen restrictions on the hiring of foreign nationals.
tassl 10y ago
Born in Barcelona, living in the US. I am not sure the real problem is as described in the article. While there is a percentage of the population with no real skills, there are highly skilled people with either no work or working on positions for which they are overqualified (frequently non-permanent employees [1]). I know people that are doing "fine" by Spanish standards, which is around 30K/year, but the majority of my friends and university classmates are making way below that bar. Most of them with the equivalent undergrad + master. If the problem was "just" the lack of preparation among the youth, I am pretty sure that migrants would have trouble finding jobs on other countries (UK, Germany are the most frequent "destinations"), which is not the case. In my opinion, there is a big cultural problem; long hours, low salaries (employer) and a lack of culture for optimizing work hours (employee). If we add this cultural problem to the incompetence of the Spanish government, that basically prioritizes building pharaonic public structures (like the high speed train) or taxes technology (solar panels [2]) instead of investing on technology and/or innovation we have the current situation. [1] http://www.npr.org/sections/parallels/2015/12/18/459854096/spains-economy-is-expanding-but-most-new-jobs-are-temporary http://www.npr.org/sections/parallels/2015/12/18/459854096/s... [2] http://www.renewableenergyworld.com/articles/2015/10/spain-approves-sun-tax-discriminates-against-solar-pv.html http://www.renewableenergyworld.com/articles/2015/10/spain-a...
ycosynot 10y ago
Don't forget among the 5M unemployed, the employed who don't want to pay taxes, so are not declared. I don't know the number, but Spain seems to have high tax rates.

by altoz 10y ago

charlesdm 10y ago

Very true. Just compare salaries of software engineers in most EU countries with salaries in the US. If you're a good developer, 99% of the time it's better to work remotely from Europe for a US company. It really is a simple problem to solve -- pay talented people in Europe more. And yet, for some reason, this is often dismissed by CEOs as a ridiculous statement. They're probably the same people who think you need 100 software engineers to complete a complex technology project.

scribu 10y ago
> It really is a simple problem to solve -- pay talented people in Europe more. Playing devil's advocate: If we limit the discussion to pure tech companies that target a global market, then yes, it is that simple. But there is a vast majority of companies that do not belong to that category, yet require software developers. I'm thinking primarily of Spanish software agencies that have other Spanish companies as clients.
- charlesdm 10y ago
  There's often still significant leeway. I'm based in Belgium - most senior developers probably make between €3-4000/mo (before tax) here. That's for guys in their mid 30s, early 40s. So a bit better than Spain. My cousin's husband owns a small agency (15-20 people) and sells one developer at €2.000 a day on €500k-1m projects. I think on average they're billed out around 150 days a year, so grossing around €300k per developer, per annum. Paying developers more would mean less profits ending up in his pocket.
  - ido 10y ago
    I'm surprised Belgium isn't better paid, even in Berlin you'd earn better than that (aside from maybe game-dev) and in western Germany you'll earn better than in Berlin.
    - Zardoz84 10y ago
      As junior, I get 1800€/mo (before taxes). I'm Spanish and I live on Madrid.
    - charlesdm 10y ago
      Part of that is because employer contributions (tax + social security) are quite high on wages. Total cost to the company is probably double, i.e. €6.5-8k. In addition, income tax is also very high, so employees are left with <2-2.5k after tax on average. There are ways to reduce the tax rate a bit to an acceptable level, but this depends on the goodwill of your employer. Most just don't care, even though it could mean an extra €1,000 - €1,500 in after tax salary for their employees, without increasing cost to the company. You can even ask the tax authority for a free tax ruling, meaning they approve this and can't challenge it later on. I know what I'd do if I wanted to hire great local developers.. starting by offering a salary that is 1/3rd higher of most other local companies probably isn't a bad starting point.
- zanny 10y ago
  You only "require" the things you can afford. If a company does not have the revenue to afford paying real market rates for developers, they might want a dev, or even need one, but that doesn't mean they can have one any less than a homeless man can have shelter when he needs it but doesn't have the means to afford it. I always hate the mindset that because developers are in demand for some reason lower wages are acceptable. The opposite is true, exclusively, than when developers are in demand you should demand more money, and accept no less. It is extraordinarily rare for a worker to have any leverage over their employer, to such a degree that there is this systemic culture of employers being unable to stomach the concept of a developer being a skilled professional that demands a professional wage above and beyond what someone driving a truck or working in Excel makes.
  - pakitan 10y ago
    I think you're missing the point. No one is saying that developers should be ok with getting less money when they can get more. The point is that as an employee, you bring certain value to the company. And that value is often capped not by your skills and productivity but by the type of company you work for. And there are less companies in Europe of the type that can afford to pay very well.
duckingtest 10y ago
I don't think it's that developers are underpaid in Europe. They are just objectively less productive there. After all it's a very specialized job that requires modern, developed economy open to disruptions to be really productive. On the extreme opposite end of a spectrum - a pre-industrial economy - a developer's productivity would be zero. American nominal GDP per capita is 2.13 times that of Spain's and 1.38x that of Germany's, and the distance keeps increasing. There are many possible causes, but I think lower salaries are a symptom.
- pcrh 10y ago
  GDP per capita seems to be a curious way to estimate if a local dev is likely to be productive. Would a Luxembourgish, Swiss or Norwegian dev be expected to be more productive than one from the US or UK? It seems to me that the prime determinant of pay is how close the worker's "category" is to the money. So in a start-up intensive environment like the Bay Area, the devs are also sometimes the executives, and executives are often former devs, so devs get paid correspondingly.
  - duckingtest 10y ago
    Switzerland does have higher average pay CHF 91,374 = $93,703.5 [0] compared to USA $68,082 [1]. Their nominal GDP per capita is 36.62% higher and the pay is 37.6% higher. Norway interestingly has almost the same pay as USA - $68,737 [2], probably because of high share of oil extraction in GDP (22% [3]) which skews the result. If you subtract oil share from the GDP, you get $56,195.88 nominal GDP per capita, which is almost the same as the American one ($57,220)! Now Luxembourg is a tax haven/financial center with a population of half a million so I don't think it's a relevant comparison. Just due to population to get something close to true pay average you would have to ask a relatively (to other countries) very big percentage of their developers. Same site for comparable data [0] http://www.payscale.com/research/CH/Job=Software_Engineer/Salary http://www.payscale.com/research/CH/Job=Software_Engineer/Sa... [1] http://www.payscale.com/research/US/Job=Software_Developer/Salary http://www.payscale.com/research/US/Job=Software_Developer/S... [2] http://www.payscale.com/research/NO/Job=Software_Developer/Salary http://www.payscale.com/research/NO/Job=Software_Developer/S... [3] https://www.ssb.no/en/befolkning/artikler-og-publikasjoner/_attachment/237252?_ts=1516c73e3a8 https://www.ssb.no/en/befolkning/artikler-og-publikasjoner/_... page 40, graph
prostoalex 10y ago
> It really is a simple problem to solve -- pay talented people in Europe more. And yet, for some reason, this is often dismissed by CEOs as a ridiculous statement. I don't think it's European vs American CEOs, it's treating software engineering as cost center vs value creator. Even in the US one would likely have a hard time procuring a large compensation package employed as a software engineer in a utility company, aerospace company or insurance industry, but the attitudes take a drastic 180 turn with tech-centric and tech-oriented companies where software creates new value.
- chii 10y ago
  > have a hard time procuring a large compensation package employed as a software engineer in a utility company in which case, there ought to be market pressure for software engineers to move away from such companies. When the company finds out they actually need a good programmer, they end up having to pay more again for quality (perhaps, indirectly, via consulting companies). But the current anecdotal evidence is that those companies _can_ pay very little, and yet, no catastrophe has happened. The only valid business conclusion is that the highly paid engineers aren't needed there!
  - aianus 10y ago
    > But the current anecdotal evidence is that those companies _can_ pay very little, and yet, no catastrophe has happened. Healthcare.gov?
  - wtbob 10y ago
    > But the current anecdotal evidence is that those companies _can_ pay very little, and yet, no catastrophe has happened. The only valid business conclusion is that the highly paid engineers aren't needed there! They pay in other ways: increased layers of management, decreased development speed, decreased software quality. One argument is that they manage to stay in business anyway — but I think we're actually seeing places like that start to go out of business, or at least be surpassed, by nimbler firms. The world is all about information, and those that can do more, faster with it are at a tremendous advantage.
tluyben2 10y ago
> If you're a good developer, 99% of the time it's better to work remotely from Europe for a US company Again, how do people get those jobs? I have a lot of friends in the underpaid situation and they applied for stuff on HN; most of them don't hear anything back or have problems with the interviews. They are very good devs though. Loyal too; don't think they would ever leave once on board.

deleted 10y ago

[deleted]

HannibalLecter 10y ago

Guidance counselors need to stop asking kids what they want to do when they grow up and start telling them what is likely to become available by the time they are able to work (post education), matrix'd with the student's potential. Too many idiots trying to be programmers that are no better than VBA and Dreamweaver script kids. If you want to be a programmer, your only option is to get your skillset into group #2, rather than build the skillset you want to build. The best programmers are good at the things people strongly dislike.

joe_the_user 10y ago

1. 5 million unemployed people 2. very highly sought after workers "If there was excess of people in group 2, then there'd be no upward pressure on wages, in the fashion that there is none in group 1. If we import or train enough of group 2, perhaps we can make this happen..." Basically, the message for each group - "we want to pay less".

gozur88 10y ago
That's the way I read it. Employers don't want to pay enough to motivate people to develop skills for which they have openings. They'd rather hire foreigners than hire locals and train them. So they put pressure on the government to swamp the market with newly trained/educated people as well as loosen restrictions on the hiring of foreign nationals.

tassl 10y ago

Born in Barcelona, living in the US. I am not sure the real problem is as described in the article. While there is a percentage of the population with no real skills, there are highly skilled people with either no work or working on positions for which they are overqualified (frequently non-permanent employees [1]). I know people that are doing "fine" by Spanish standards, which is around 30K/year, but the majority of my friends and university classmates are making way below that bar. Most of them with the equivalent undergrad + master. If the problem was "just" the lack of preparation among the youth, I am pretty sure that migrants would have trouble finding jobs on other countries (UK, Germany are the most frequent "destinations"), which is not the case. In my opinion, there is a big cultural problem; long hours, low salaries (employer) and a lack of culture for optimizing work hours (employee). If we add this cultural problem to the incompetence of the Spanish government, that basically prioritizes building pharaonic public structures (like the high speed train) or taxes technology (solar panels [2]) instead of investing on technology and/or innovation we have the current situation. [1] http://www.npr.org/sections/parallels/2015/12/18/459854096/spains-economy-is-expanding-but-most-new-jobs-are-temporary http://www.npr.org/sections/parallels/2015/12/18/459854096/s... [2] http://www.renewableenergyworld.com/articles/2015/10/spain-approves-sun-tax-discriminates-against-solar-pv.html http://www.renewableenergyworld.com/articles/2015/10/spain-a...

ycosynot 10y ago

Don't forget among the 5M unemployed, the employed who don't want to pay taxes, so are not declared. I don't know the number, but Spain seems to have high tax rates.